Buying an Existing Condo – The Budget

The Budget

The question most people ask prospective lawyers is “How much do you charge?” The question you should be asking is “How much money do I need to budget for my purchase?”

Our aim is to provide you with clarity regarding your legal expenses and other costs in the beginning so you can properly budget for your purchase. Moving is stressful enough without finding out on closing that the costs are higher than anticipated.

There are 3 main categories of expenses to budget for:


Legal Fees and Expenses

The variance in legal costs from law firm to law firm is actually fairly small and our legal costs are competitive with other law firms.  Give us a call at (613) 746-8115 and we will be pleased to provide you with both the total legal costs (fees, all expenses and HST) as well as a breakdown so you can properly budget for your purchase and avoid nasty surprises on closing.


Land Transfer Tax

Land Transfer Tax is a provincial tax that is applicable on the purchase price of the property.

Quick Formula (for single family homes)
Price Formula
$55k – $250k 1% of price – $275 = LTT
$250k to $400k 1.5% of price – $1 525 = LTT
over $400k 2% of price – $3 525 = LTT

First Time Buyers are eligible for a rebate (reduction) of up to $4,000.  There is a great deal of misunderstanding as to who qualifies as a “First Time Buyer”. To qualify:

  • Buyer never owned a home before anywhere in the world; AND
  • If Buyer is legally married, buyer’s spouse has never owned real property anywhere in the world during the time of marriage

In some cases (eg. unmarried or common law couples), one buyer qualifies for a rebate and the other does not.  Partial rebates apply in those cases.

[vc_cta_button2 h2="Call Us"]Give us a call and we will be happy to discuss your eligibility in more detail.

613 746-8115[/vc_cta_button2]


Adjustments and Other Expenses

  • Municipal Property Taxes: You share the year’s tax assessment with the seller pro-rata.  On closing, the seller will have already paid the municipality either more or less than their share of the year’s taxes.  The difference is the adjustment and it is paid on closing.
  • Condominium Fees:  Like with property taxes, the current month’s condo fees are shared pro-rata with the seller.  The seller has typically paid the current month’s condo fees and you pay your share of the month to the seller on closing as an adjustment.
  • Lender deductions:  From your gross loan, lenders may deduct any applicable CMHC premiums, retail sales tax on those premiums, a holdback for municipal property taxes if they are to be paid through your mortgage, commitment fees in some cases, etc.  The amount you are borrowing and the amount the lender advances to the lawyer are not always the same.  We recommend you have your lender advise you what the net advance to the lawyer will be so you can budget accordingly.